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Term Loan Credit Agreement

This is an actual contract by Highwoods Realty Ltd. Partnership.

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Sectors: Real Estate
Governing Law: North Carolina, View North Carolina State Laws
Effective Date: February 02, 2011
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Exhibit 10.13

















TERM LOAN AGREEMENT




Dated as of February 2, 2011




among




HIGHWOODS PROPERTIES, INC.,

HIGHWOODS SERVICES, INC.

and

HIGHWOODS REALTY LIMITED PARTNERSHIP,

as Borrowers,




WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent,




WELLS FARGO SECURITIES, LLC,

as Sole Lead Arranger and Sole Bookrunner,




BRANCH BANKING AND TRUST COMPANY,

PNC BANK, NATIONAL ASSOCIATION,

REGIONS BANK

and

U.S. BANK NATIONAL ASSOCIATION,

as Documentation Agents,




and




The Other Lenders Party Hereto






















TABLE OF CONTENTS







Section Page ARTICLE I DEFINITIONS AND ACCOUNTING TERMSnone 1 1.01 Defined Terms; Accounting Treatment; Borrowers' Agent and Liabilities. 1 1.02 Other Interpretive Provisions. 22 1.03 Accounting Terms. 22 1.04 Rounding. 23 1.05 Times of Day. 23 1.06 Calculation of Values. 23 1.07 Joint and Several Liability of the Borrowers. 24 1.08 Appointment of Principal Borrower as Agent for Borrowers. 25 ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONSnone 25 2.01 Loans. 25 2.02 Borrowings, Conversions and Continuations of Loans. 25 2.03 Prepayments. 26 2.04 Repayment of Loans. 27 2.05 Interest. 27 2.06 Fees. 27 2.07 Computation of Interest and Fees. 28 2.08 Evidence of Debt. 28 2.09 Payments Generally; Administrative Agent' s Clawback. 28 2.10 Sharing of Payments by Lenders. 29 2.11 Maturity Date. 30 2.12 Additional Loans. 30 2.13 Funds Transfer Disbursements. 31 2.14 Defaulting Lenders. 32 ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITYnone 33 3.01 Taxes. 33 3.02 Illegality. 35 3.03 Inability to Determine Rates. 35 3.04 Increased Costs. 35 3.05 Compensation for Losses. 36 3.06 Mitigation Obligations; Replacement of Lenders. 37 3.07 Survival. 37 ARTICLE IV CONDITIONS PRECEDENTnone 37 4.01 Conditions of Borrowing. 37 4.02 Additional Conditions to all Loans. 39 ARTICLE V REPRESENTATIONS AND WARRANTIESnone 39 5.01 Existence, Qualification and Power; Compliance with Laws. 39 5.02 Authorization; No Contravention. 40 5.03 Governmental Authorization; Other Consents. 40 5.04 Binding Effect. 40 5.05 Financial Statements; No Material Adverse Effect; No Internal Control Event. 40 5.06 Litigation. 41 5.07 No Default. 41 5.08 Ownership of Property; Liens. 41 5.09 Environmental Compliance. 41 5.10 Insurance. 41







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5.11 Taxes. 42 5.12 ERISA Compliance. 42 5.13 Subsidiaries; Equity Interests. 42 5.14 Margin Regulations; Investment Company Act. 43 5.15 Disclosure. 43 5.16 Compliance with Laws. 43 5.17 Intellectual Property; Licenses, Etc. 43 ARTICLE VI AFFIRMATIVE COVENANTSnone 43 6.01 Financial Statements. 43 6.02 Certificates; Other Information. 44 6.03 Notices. 46 6.04 Payment of Obligations. 47 6.05 Preservation of Existence, Etc. 47 6.06 Maintenance of Properties. 47 6.07 Maintenance of Insurance. 47 6.08 Compliance with Laws. 47 6.09 Books and Records. 47 6.10 Inspection Rights. 48 6.11 Use of Proceeds. 48 6.12 Additional Guarantors; Release of Guarantors. 48 6.13 Non-Guarantor Subsidiary Cash Flows. 49 6.14 REIT Status. 49 6.15 Environmental Matters. 49 ARTICLE VII NEGATIVE COVENANTSnone 50 7.01 Liens. 50 7.02 Fundamental Changes. 51 7.03 Dispositions. 51 7.04 Change in Nature of Business. 52 7.05 Transactions with Affiliates. 52 7.06 Burdensome Agreements. 52 7.07 Use of Proceeds. 52 7.08 Financial Covenants. 52 7.09 Organizational Documents; Ownership of Subsidiaries. 53 7.10 Non-Guarantor Subsidiary Restrictions. 53 7.11 Negative Pledges. 53 7.12 Sale Leasebacks. 54 7.13 Prepayments of Indebtedness, etc. 54 7.14 Anti-Terrorism Laws; FCPA. 54 ARTICLE VIII EVENTS OF DEFAULT AND REMEDIESnone 54 8.01 Events of Default. 54 8.02 Remedies Upon Event of Default. 56 8.03 Application of Funds. 57 ARTICLE IX ADMINISTRATIVE AGENTnone 57 9.01 Appointment and Authority. 57 9.02 Rights as a Lender. 57 9.03 Exculpatory Provisions. 58 9.04 Reliance by Administrative Agent. 58 9.05 Delegation of Duties. 59 9.06 Resignation of Administrative Agent. 59 9.07 Non-Reliance on Administrative Agent and Other Lenders. 59 9.08 No Other Duties, Etc. 60







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9.09 Administrative Agent May File Proofs of Claim. 60 9.10 Guaranty Matters. 61 ARTICLE X MISCELLANEOUSnone 61 10.01 Amendments, Etc. 61 10.02 Notices; Effectiveness; Electronic Communication. 62 10.03 No Waiver; Cumulative Remedies. 63 10.04 Expenses; Indemnity; Damage Waiver. 63 10.05 Payments Set Aside. 65 10.06 Successors and Assigns. 65 10.07 Treatment of Certain Information; Confidentiality. 67 10.08 Right of Setoff. 67 10.09 Interest Rate Limitation. 68 10.10 Counterparts; Integration; Effectiveness. 68 10.11 Survival of Representations and Warranties. 68 10.12 Severability. 68 10.13 Replacement of Lenders. 69 10.14 Governing Law; Jurisdiction; Etc. 69 10.15 Waiver of Jury Trial. 70 10.16 No Advisory or Fiduciary Responsibility. 70 10.17 USA PATRIOT Act Notice. 71 10.18 Time of the Essence. 71 10.19 Entire Agreement. 71





SCHEDULES



2.01 Commitments

5.05 Supplement to Interim Financial Statements

5.06 Litigation

5.09 Environmental Matters

5.10 Insurance

5.13 Subsidiaries and Other Equity Investments

5.17 Intellectual Property Matters

Administrative Agent' s Office; Certain Addresses for Notices



EXHIBITS



A Form of Notice of Borrowing

B Form of Notice of Continuation

C Form of Notice of Conversion

D Form of Note

E Form of Officer' s Certificate

F Form of Assignment and Assumption

G Form of Guaranty

H Opinion Matters

Form of Transfer Authorizer Designation Form








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TERM LOAN AGREEMENT







This TERM LOAN AGREEMENT (" Agreementnone" ) is entered into as of February 2, 2011, among HIGHWOODS REALTY LIMITED PARTNERSHIP, a North Carolina limited partnership (" Highwoods Realtynone" ), HIGHWOODS PROPERTIES, INC., a Maryland corporation (" Highwoods Propertiesnone" ) and HIGHWOODS SERVICES, INC., a North Carolina corporation (" Highwoods Servicesnone" ) (Highwoods Realty, Highwoods Properties and Highwoods Services are hereinafter referred to individually as a " Borrowernone" and collectively as the " Borrowersnone" ), each lender from time to time party hereto (collectively, the " Lendersnone" and individually, a " Lendernone" ), WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent (the " Administrative Agentnone" ), BRANCH BANKING AND TRUST COMPANY, PNC BANK, NATIONAL ASSOCIATION, REGIONS BANK and U.S. BANK NATIONAL ASSOCIATION, as Documentation Agents (the " Documentation Agentsnone" ), and WELLS FARGO SECURITIES, LLC, as Sole Arranger and Sole Bookrunner (the " Arrangernone" ).




WHEREAS , the Borrowers have requested that the Lenders make available to the Borrowers term loans in an aggregate amount of $200,000,000; and




WHEREAS , the Lenders are willing to do so on the terms and conditions set forth herein.




NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:




ARTICLE I







DEFINITIONS AND ACCOUNTING TERMS





1.01 Defined Terms; Accounting Treatment; Borrowers' Agent and Liabilities.





As used in this Agreement, the following terms shall have the meanings set forth below:




" Acquired Propertiesnone" means, at any time, all Properties acquired by the Subject Parties within the previous three (3) calendar months from any third party entity through an arms length transaction.




" Adjusted EBITDAnone" means, for any period, the sum of (a) EBITDA for such period, lessnone (b) aggregate Capital Expenditure Reserves for all Properties with respect to such period; providednone , that such sum shall be exclusive of (i) any amount for such period attributable to the Straight-Lining of Rents and (ii) the amount (if any) of amortization of capitalized lease incentive costs which is recorded as a reduction of revenues under GAAP for any specified period.




" Adjusted NOInone" means, with respect to any applicable time period for any Property, an amount, not less than zero (0), equal to (a) Net Operating Income for such period with respect to such Property lessnone (b) the sum of (i) the Capital Expenditure Reserve amount for such Property during such period, plusnone (ii) a management fee in the amount of three percent (3%) of total revenues derived from the Property during such period; providednone , that such amount shall be exclusive of any amount for such period attributable to the Straight-Lining of Rents and the amount (if any) of amortization of capitalized lease incentive costs which is recorded as a reduction of revenues under GAAP for any specified period; providednone , further, that, in each case, all amounts included in the above calculations with respect to Properties owned by Unconsolidated Affiliates (and not otherwise adjusted for interests in Unconsolidated Affiliates) shall be adjusted to include only that portion of such amounts attributable to Unconsolidated Affiliate Interests.




" Administrative Agentnone" means Wells Fargo Bank, National Association in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.




" Administrative Agent' s Officenone" means the Administrative Agent' s address and, as appropriate, account as set forth on Schedule 10.02none , or such other address or account as the Administrative Agent may from time to time notify the Borrowers and the Lenders.
















" Administrative Questionnairenone" means an Administrative Questionnaire in a form supplied by the Administrative Agent.




" Affiliatenone" means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. In no event shall the Administrative Agent or any Lender be deemed to be an Affiliate of any of the Borrowers.




" Aggregate Commitmentsnone" means the Commitments of all the Lenders. The Aggregate Commitments on the Closing Date shall be $200,000,000.




" Agreementnone" means this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.




" Annualized Adjusted NOInone" means (a) for each Property owned for twelve (12) months or more, Adjusted NOI for such Property for the immediately preceding twelve (12) month period; (b) for each Property owned for a period of less than twelve (12) months and for each Property formerly qualifying as a Non-Income Producing Property that has been an Income-Producing Property for less than twelve (12) months, Adjusted NOI for such Property calculated by annualizing acquisition-to-date Adjusted NOI for such Property and adjusting (through appropriate pro-rating, removal or other correction) for all annual or one-time lump sum payments or expenses with respect to the Property or for any extraordinary income or expense items with respect to such Property; providednone , that all amounts included in the above calculations with respect to Properties owned by Unconsolidated Affiliates (and not otherwise adjusted for interests in Unconsolidated Affiliates) shall be adjusted to include only that portion of such amounts attributable to Unconsolidated Affiliate Interests.




" Applicable Percentagenone" means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the aggregate outstanding principal balance of the Loans represented by such Lender' s Loan at such time.




" Applicable Ratenone" means, for any day, subject to adjustment as provided in the penultimate paragraph of this definition, the rate per annum set forth below opposite the applicable Credit Rating then in effect:



Pricing Level Credit Rating Applicable Rate I BBB+/ Baa1 or higher 1.80% II BBB/ Baa2 2.00% III BBB-/ Baa3 2.20% IV Lower than BBB-/Baa3 2.95%




The Applicable Rate shall be adjusted as of the first day of the first calendar month immediately following any change in the Credit Rating. The Principal Borrower shall notify the Administrative Agent in writing promptly after becoming aware of any change in the Credit Rating.




" Approved Fundnone" means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.




" Arrangernone" means Wells Fargo Securities, LLC in its capacity as sole lead arranger and sole book runner.




" Assignee Groupnone" means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.




" Assignment and Assumptionnone" means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)none ), and accepted by the Administrative Agent, in substantially the form of Exhibit Fnone or any other form approved by the Administrative Agent.






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" Attributable Indebtednessnone" means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.




" Audited Financial Statementsnone" means the audited consolidated balance sheet of Highwoods Properties and its Subsidiaries for the fiscal year ended December 31, 2009, and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year of the Highwoods Properties and its Subsidiaries, including the notes thereto.




" Base Ratenone" means, the Eurodollar Market Index Rate; provided, that if for any reason the Eurodollar Market Index Rate is unavailable, Base Rate shall mean the per annum rate of interest equal to the Federal Funds Rate plus one and one-half of one percent (1.50%).




" Base Rate Loannone" means any portion of a Loan that bears interest based on the Base Rate.




" Borrowernone" and " Borrowersnone" have the meanings specified in the introductory paragraph hereto.




" Borrower Materialsnone" has the meaning specified in Section 6.02none .




" Borrowingnone" means the making of the Loans on the Closing Date pursuant to Section 2.01none .




" Business Daynone" means (a) a day of the week (but not a Saturday, Sunday or holiday) on which the offices of the Administrative Agent in San Francisco, California are open to the public for carrying on substantially all of the Administrative Agent' s business functions, and (b) if such day relates to a Eurodollar Rate Loan, any such day that is also a day on which dealings in Dollars are carried on in the London interbank market. Unless specifically referenced in this Agreement as a Business Day, all references to " days" shall be to calendar days.




" Capital Expendituresnone" means all expenditures required for the leasing of space within Properties owned and previously leased by the Consolidated Parties, including upfit expenses and leasing commissions, together with expenses for renovation or improvement of existing properties that are classified as capital expenditures under GAAP. Leasing and tenant improvements expenditures with respect to space not previously leased shall not be included in any calculation of Capital Expenditures, but must be reported to the Administrative Agent on a quarterly basis as set forth in Section 6.02none .




" Capital Expenditure Reservenone" means, with respect to (a) any office, industrial, retail or other non-multi family Property that is an Income-Producing Property or a Non-Income Producing Property for which a certificate of occupancy has been issued, a normalized annual reserve for replacement reserves, capital expenditures, tenant improvements, and leasing commissions in the amount of $0.50 per year per square foot of net leaseable area contained in such Property (pro rated for the portion of such year that the applicable Property qualifies under this clause (a)), (b) any multi-family Property that is an Income-Producing Property or a Non-Income Producing Property for which a certificate of occupancy has been issued, a normalized annual reserve for replacement reserves, capital expenditures, tenant improvements, and leasing commissions in the amount of $250 per year per unit and (c) any other Non-Income Producing Property, zero (0); provided, that all amounts included in the above calculations with respect to Properties owned by Unconsolidated Affiliates (and not otherwise adjusted for interests in Unconsolidated Affiliates) shall be adjusted to include only that portion of such amounts attributable to Unconsolidated Affiliate Interests. When the Capital Expenditure Reserve is used in computing an amount with respect to a period which is shorter than a year, said amount shall be appropriately pro rated.






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" Capitalization Ratenone" means nine percent (9.00%), except with respect to calculations involving the Adjusted NOI related to the CC Plaza Project, in which case the " Capitalization Rate" shall be eight percent (8.00%); provided, however, that (a) the Capitalization Rate (both generally and for the CC Plaza Project) shall be reviewed annually and shall be subject to an annual adjustment of not more than one quarter of one percent (0.25%) by the Supermajority Lenders in their sole discretion based upon market conditions for comparable property types and (b) no adjustment pursuant to the foregoing clause (a) shall occur until on or after the date occurring one (1) year following the Closing Date and, following any such adjustment, no further adjustment to the Capitalization Rate shall occur until the passage of one (1) year following such adjustment; provided, that to the extent any adjustment in the Capitalization Rate is the cause of a Default hereunder (and such Default would not have occurred without such adjustment), the Borrowers shall have the cure period referenced in Section 8.01(b)none in which to remedy such default prior to such Default being considered an Event of Default.




" Cash Equivalentsnone" means (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve (12) months from the date of acquisition, (b) U.S. dollar denominated time deposits and certificates of deposit of (i) any Lender, (ii) any domestic commercial bank of recognized standing having capital and surplus in excess of $500,000,000 or (iii) any bank whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from Moody' s is at least P-1 or the equivalent thereof (any such bank being an " Approved Banknone" ), in each case with maturities of not more than two hundred seventy (270) days from the date of acquisition, (c) commercial paper and variable or fixed rate notes issued by any Approved Bank (or by the parent company thereof) or any variable rate notes issued by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1 (or the equivalent thereof) or better by Moody' s and maturing within six (6) months of the date of acquisition, (d) repurchase agreements with a bank or trust company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or fully guaranteed by the United States of America in which any Loan Party shall have a perfected first priority security interest (subject to no other Liens) and having, on the date of purchase thereof, a fair market value of at least 100% of the amount of the repurchase obligations and (e) Investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940, as amended, which are administered by reputable financial institutions having capital of at least $500,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (d).




" CC Plaza Projectnone" means, to the extent owned (in whole or in part) by any Subject Party, that certain development known as Country Club Plaza located at 310 Ward Parkway, Kansas City Missouri 64112 currently owned by Highwoods Realty.




" Change in Lawnone" means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.




" Change of Controlnone" means the occurrence of any of the following events:




(a) any Person or two or more Persons acting in concert shall have acquired beneficial ownership, directly or indirectly, of, or shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of, control over, Voting Stock of Highwoods Properties (or other securities convertible into such Voting Stock) representing thirty-five percent (35.0%) or more of the combined voting power of all Voting Stock of Highwoods Properties, or



(b) during any period of up to twenty-four (24) consecutive months, commencing after the Closing Date, individuals who at the beginning of such twenty-four (24) month period were directors of Highwoods Properties (together with any new director whose election by Highwoods Properties' Board of Directors or whose nomination for election by Highwoods Properties' shareholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the directors of Highwoods Properties then in office, or






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(c) Highwoods Properties or any Wholly Owned Subsidiary which is a Loan Party shall fail to be the sole general partner of Highwoods Realty or own, directly or indirectly, a majority of the Equity Interests of Highwoods Services. As used herein, " beneficial ownership" shall have the meaning provided in Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934.




" Closing Datenone" means the first date all the conditions precedent in Section 4.01none are satisfied or waived in accordance with Section 10.01none .




" Codenone" means the Internal Revenue Code of 1986, as amended, and any successor statute thereto, as interpreted by the rules and regulations issued thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed also to refer to any successor sections.




" Commitmentnone" means, as to each Lender, its obligation to make a Loan to the Borrowers pursuant to Section 2.01none , in an aggregate principal amount not to exceed the amount set forth opposite such Lender' s name on Schedule 2.01none .




" Consolidated Partiesnone" means a collective reference to the Principal Borrower and its consolidated Subsidiaries; and " Consolidated Party" means any one of them.




" continuenone" , " continuationnone" and " continuednone" each refers to the continuation of a Eurodollar Rate Loan from one Interest Period to another Interest Period pursuant to Section 2.02none .




" Contractual Obligationnone" means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.




" Controlnone" means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. " Controllingnone" and " Controllednone" have meanings correlative thereto.




" convertnone" , " conversionnone" and " convertednone" each refers to the conversion of a Loan of one Type into a Loan of another Type pursuant to Section 2.02none .




" Credit Ratingnone" means, with respect to Highwoods Properties (a) at such time that Highwoods Properties maintains an unsecured long term debt rating from either or both of Moody' s and S&P (or one of their respective successors or assigns), the higher of such publicly announced ratings (or such rating if there is only one) for the unsecured long term debt rating of Highwoods Properties or (b) at all other times, the unsecured long term debt rating equivalent to BB+ from S&P and Ba1 from Moody' s.




" Debtor Relief Lawsnone" means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.




" Defaultnone" means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.




" Default Ratenone" means a rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus four percent (4.0%) per annum.




" Defaulting Lendernone" means any Lender that (a) has failed to fund (or has failed, within 3 Business Days after request by the Administrative Agent, to confirm that it will comply with the terms of this Agreement relating to its obligations to fund) any portion of its Loan required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within three Business Days of the d
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